Essential workers who contract covid-19 get workers comp protection. Company behind collapsed mask deal under investigation. Hospitals are struggling.
Good morning, California. It’s Thursday, May 7.
Workers’ comp burden of proof now on employers
In a big win for labor unions, Gov. Gavin Newsom signed an executive order Wednesday that presumes California’s essential workers who contract COVID-19 did so on the job.
The order makes it easier for employees to access workers’ compensation benefits by shifting the burden of proof to employers, who will have to prove employees did not contract COVID-19 at work in order to avoid a claim, CalMatters’ Barbara Feder Ostrov reports. Such an expansion has been estimated to cost the state workers’ compensation system billions a year.
- Newsom: “This is a way of providing support to our critical workers that are essential in our capacity not only to meet the needs of people today, but as we begin to enter into this new phase and start to reopen our economy.”
The order applies to all essential workers, not just health care workers and first responders. It lasts for two months and retroactively covers those who tested positive for coronavirus within 14 days of working after Newsom’s March 19 stay-at-home order.
It was met with strong approval from labor groups and intense criticism from business groups, who say they can ill afford the increased insurance premiums.
- Art Pulaski, executive secretary-treasurer of the California Labor Federation: “California continues to set the national standard for worker protection during this crisis. Gov. Newsom’s order today adds a vital layer of protection to essential workers putting their lives at risk to provide for our families during this pandemic.”
- John Kapateck, California director of the National Federation of Independent Business: “Our policymakers need to make sure they are doing the math so these regulations, rules and costs don’t have the opposite effect of drying up jobs. There’s not a tree in a small business owner’s backyard where they can pluck the Benjamins.”
The Bottom Line: As of 7 p.m. Wednesday night, California had 60,253 confirmed coronavirus cases and 2,449 deaths from the virus, according to a Los Angeles Times tracker. (These numbers are different from those of the state Department of Public Health, which are updated less often.)
Also: CalMatters is tracking, by county, positive and suspected cases of COVID-19 patients hospitalized, and those in intensive care, throughout the state. We’re also tracking the state’s daily actions. And we have an explainer for everything you need to know about California’s response to coronavirus.
Mask dealer that CA wired $497 mil to is under federal probe
The U.S. Department of Justice has reportedly opened a criminal investigation into Blue Flame Medical LLC, the company to which California sent $456.9 million in March for medical-grade masks before the deal mysteriously collapsed hours later, as CalMatters’ Laurel Rosenhall first reported Tuesday.
Federal prosecutors are focused on canceled contracts the company signed with Maryland and California, according to the Washington Post, which reported the investigation Wednesday morning.
It turns out California lawmakers weren’t aware of the nearly half-billion dollar deal with Blue Flame, raising questions about Newsom’s transparency with how taxpayer funds are being spent during the pandemic, Laurel reports.
- Jay Obernolte, Republican assemblyman from Big Bear Lake: “I wish the governor had been more engaging and forthright in involving the Legislature in the entire process.”
On Wednesday evening, Newsom abruptly released the state’s nearly $1 billion face mask contract with Chinese company BYD, signed after the Blue Flame deal fell apart. His administration had refused to share the contract for weeks, citing the chaos of the medical-supply marketplace, but the governor said Wednesday enough masks had arrived to make him comfortable releasing details.
He also alluded to the failed Blue Flame deal in his Wednesday press briefing.
- Newsom: “There were some larger contracts that didn’t cost the taxpayers a penny but were cautionary tales. The good news is we learned a lot in that process from those previous contracts and we have partners now that we didn’t have in the past, including the Department of Justice, the FBI and many others that are helping scrutinize these contracts.”
Other stories you should know
1. Amid a public health crisis, California hospitals barely staying in business
We may be in the middle of a pandemic, but California hospitals and clinics are struggling to stay afloat and health care workers are facing layoffs, furloughs and pay cuts, CalMatters’ Ana Ibarra reports. This week, California hospitals plan to ask the state for $1 billion to help make up for revenue lost from the cancellation of elective surgeries and other procedures. And though a recent survey shows 49% of medical practices have laid off employees, the state isn’t prioritizing rehiring them for the California Health Corps, formed to treat a coronavirus patient surge that has yet to materialize. Some lawmakers find that illogical.
- Jim Wood, Democratic assemblyman of Healdsburg: “My rationale is they’re going to go on unemployment, and then we turn around and pay someone else.”
2. Coronavirus poses greater health and economic risks to Californians of color, poll finds
The coronavirus pandemic is disproportionately affecting the safety and financial well-being of racial minorities in California, who are more likely to work jobs that require close contact with others and to face greater economic threat from COVID-19, according to a poll released Wednesday from UC Berkeley’s Institute of Governmental Studies. However, they are also more likely to support the shelter-in-place order.
Some key findings from the poll, which surveyed 8,800 voters statewide:
- Working in proximity to others poses a very serious problem for 15% of whites, 27% of blacks, 28% of Asians and 40% of Latinos.
- COVID-19 poses a major financial threat to 37% of whites, 45% of Asians, 54% of blacks and 60% of Latinos.
- 53% of whites, 59% of Asians, 62% of Latinos and 67% of blacks strongly support the national shelter-in-place order.
- 68% of whites, 72% of Latinos, 76% of Asians and 81% of blacks were more concerned about the health impacts of ending the shelter-in-place too soon than the economic impacts of it continuing too long.
3. Newsom announces bevy of tax reprieves, previews revised budget
Californians who missed the April 10 property tax deadline will have their 10% penalty fee waived through May 6, 2021 as a result of an executive order Newsom signed Wednesday. But there’s a catch: Taxpayers must demonstrate financial hardship from the coronavirus pandemic.
Newsom also announced a tax extension for small business owners who owe taxes on supplies with a combined value of $100,000 or more. Those taxes, normally due today, are now due May 31.
The governor said the revised version of his proposed $222 billion budget for California will be released May 14 and will include a vaping tax. But even when revised, the budget can’t be balanced without significant help from the federal government, Newsom added.
CalMatters virtual events
Today at 1 p.m.: The pandemic is gutting local governments’ budgets, and voters don’t seem to be in a giving mood when it comes to new bond and tax measures. So where do California cities and counties go from here? Join CalMatters for a conversation with Kevin Faulconer, mayor of San Diego, and John Dunbar, board president of the League of California Cities and mayor of Napa County’s Yountville. Register here and submit questions here.
CalMatters columnist Dan Walters: As the recession hammers state and local government budgets, the state Supreme Court is weighing a case that could reveal how much their pension obligations could be reduced, if at all.
No funding delays for domestic violence shelters: California should provide grant money as an upfront payment available for immediate use by agencies, write Pedro Nava and Janna Sidley of the Little Hoover Commission.
Time to reinvest in crisis preparation: The California Legislature should reintroduce legislation to reinvest in California’s mobile field hospital program and emergency preparedness, argues Young Kim, former state Assembly member and Republican candidate for California’s 39th Congressional District.
Latinos left out: Even though Latinos are California’s largest ethnic group at 40%, they represent only 17% of the candidate pool for the state redistricting commission, writes Sonja Diaz of the UCLA Latino Policy and Politics Initiative.
Other things worth your time
New cost details emerge in California’s $1 billion mask deal with Chinese company BYD. // The Los Angeles Times
Why most of California’s largest counties aren’t reporting their coronavirus recoveries. // The San Francisco Chronicle
Why some California native tribes are cautious about ending the stay-at-home order. // The Sacramento Bee
San Francisco has a new plan to handle homelessness in the Tenderloin. But there’s been a 285% increase in tents since January. // The San Francisco Chronicle
California legislators vote to close school spending loophole. // CalMatters
Detainees in a California immigration center will stay put amid pandemic, judges rule. // The Los Angeles Times
California is gearing up to enforce its internet privacy law. Businesses say they need more time. // The San Francisco Chronicle
Donald Trump, Barack Obama and Hillary Clinton have all weighed in on the May 12 special election for this hotly contested California congressional seat. // The Washington Post
See you tomorrow.
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